Highways to hell

A harsh winter and tight budgets mean lots of potholes

ONLY the drunk, they say, drive in a straight line in Chicago. The sober zigzag to avoid falling into the city’s axle-breaking potholes. This year the craters, caused by continual freezing and thawing, are worse than ever, and the spring thaw has brought three times the usual number of complaints from citizens.

As winter retreats, holes in roads and budgets are being revealed—especially in midwestern states, which were hit hard by the polar vortex. Those states with money have made emergency appropriations for repairs; those without will have to cut summer programmes. This means not mowing the grass in parks or picking up litter. It also means delaying resurfacing of highways or fixing guard rails, and putting off capital spending.

Looking after America’s roads is a persistent headache. Although $91 billion is spent on them every year, that is nowhere near enough to keep the country’s 4.1m miles (6.6m km) of public roadways in good nick. The Federal Highway Administration estimates that $170 billion in capital investment is needed every year. Last year a report from a civil-engineering group said that 32% of America’s major roads were in poor or mediocre condition. Main roads through cities were in worst shape: almost half the miles travelled over urban interstates in 2013 were a bumpy ride. Ray LaHood, a former transport secretary, thinks the roads are probably in the worst shape they have ever been.

You shook me all night long

Highway finance comes from two main sources: cities and states, and the federal Highway Trust Fund (HTF). The HTF spends $46 billion a year and is funded by a tax of 18.4 cents on each gallon of petrol. But revenues are declining: the young drive a bit less and cars burn fuel more efficiently. Since American voters hate energy taxes, the petrol tax has not increased since 1993 and its purchasing power has declined. Adjusted for inflation, it is now worth only 11.5 cents. Had it been indexed to inflation 20 years ago (says the Centre for American Progress, a leftish think-tank), it would now be 29 cents a gallon.

The transport department reckons the highway fund will dip below $4 billion in July. That is the minimum the administration says it needs to help states meet day-to-day expenses. The American Association of State Highway and Transportation Officials says Congress must come up with $15 billion-17 billion to keep the fund solvent next year. It could either patch up the fund with another tranche of money—as it has done in the past—or refinance it by raising the petrol tax and linking this to inflation. So far, it has done neither. Options are narrow: a Gallup poll last year found that two-thirds of Americans opposed a rise in the federal petrol tax for any reason.

States also levy their own taxes, and some, such as Michigan, have been able to increase their road budgets. Massachusetts, together with Maryland and Wyoming, has managed to put up its petrol tax. Pennsylvania has imposed a tax on petrol wholesalers, which—officials seem to hope—may be less visible at the pump. In Ohio toll-revenue bonds have been issued. In Missouri a 1% increase in the sales tax for ten years has been proposed, though it may not become law. (A state representative remarked sardonically that 40% of Missourians would oppose a new tax even if it was being used “to construct the landing pad for the second coming of Christ”.)

Other states, however, cannot cope without a large federal infusion. This may be because they have lots of roads and not many people to tax, or because their finances are shaky, like Rhode Island’s. In testimony to Congress in March, Rhode Island’s director of transport said that if historical funding levels were not restored, and even with increased local investment, the state would be “managing the decline of its infrastructure”. Sue Minter, the deputy secretary of Vermont’s transport department, warned that “project delays will become cancellations”.

The HTF will probably be patched up; this is, after all, an election year. But states are worried. In Arkansas ten projects worth $60m—such as two bridge replacements in Pulaski County, round Little Rock, and the widening of north-south Route 63—have been taken off a list scheduled for funding this April. In Colorado plans to add a third lane to the I-25 between Denver and Fort Collins are in doubt, as the $1 billion project needs federal support.

Some states wonder whether tolling might raise revenue for new roads. Illinois recently won planning approval for a $1.3 billion toll road to Indiana. Forty-two states and the District of Columbia now have some sort of tolling authority. These are increasingly popular ways of financing new roads, although the slight decline in driving, and an unwillingness to pay high fees, have threatened this model in some cases. The Intercounty Connector, built to ease congestion in the suburbs of Washington, DC, costs $8 for a round trip and has failed to meet traffic projections.

Moreover, federal law does not allow tolling on existing interstates. The US Tolling Coalition, a lobby group of building companies and contractors, would like Congress to give more states the chance. But a new anti-toll lobby called the Alliance for Toll-Free Interstates (mostly composed of shipping companies) wants to prevent it, and any change in federal law will be fiercely tussled over.

Some argue that America needs to borrow more to pay for better infrastructure. This is already happening. The new $3.9 billion Tappan Zee bridge over the Hudson river in New York is financed with bonds that will be paid for by tolls. A $2.5 billion project, the North Tarrant Expressway in Fort Worth, Texas, borrowed $531m from a federal fund known as TIFIA (the Transportation Infrastructure Finance and Innovation Act), set up in 1998 to provide loans or lines of credit for improvements to “eligible transportation surfaces”.

Down payment blues

Loans must still be repaid, whether from tolls or taxes. Yet citizens seem to be more willing to stump up for local roads through local initiatives, whether higher taxes or vehicle-registration fees. Ken Orski, a transport analyst, points out that on election day in 2013 70% of ballot measures to increase or extend funding for surface transport were approved. Last year, voters in Arkansas agreed to a half-cent increase in the sales tax for highway improvements. The way ahead, perhaps?